Features
President Premadasa a Man of Action
By Lakshman. R. Watawala
As a young professional Chartered Accountant who served as Chairman of three state institutions including the Peoples Bank during the tenure of President J R Jayewardene and continued as Chairman of Peoples Bank during the period of President Premadasa, I was appointed as the Chairman and Director General of the Greater Colombo Economic Commission which later became the Board of Investment (BOI) of Sri Lanka.
As the First Chairman of the BOI from 1991-93 it will be appropriate for me to write about the economic developments undertaken during this period especially connected to export development and the 200 Garment Factory Programme on the 30th death anniversary of President Premadasa.
The Garment Factory Programme
I was Chairman of the Peoples Bank and one evening I had a call from Mr Paskaralingam, who told me that the President wanted me to take over the GCEC now BOI. This was quite a surprise and a challenge for me as I knew that the GCEC would be quite different to the Peoples Bank, a leading state commercial bank with 350 branches and over 10,000 employees in 1991.
The GCEC/BOI was used as the vehicle to achieve this massive task of setting up 200 garment factories which indeed was a dream come true due to the dynamic leadership provided by President Premadasa.
In 1977 President J R Jayewardene who ushered the Open Economy set up the Greater Colombo Economic Commission to attract foreign direct investment, setting up Free Trade Zones and promoting export oriented projects. The first Chairman of the GCEC was the late Upali Wijewardene, a leading entrepreneur/businessman selected by the president.
The GCEC/BOI was a very powerful organization coming directly under the President and had the power of giving tax Incentives, approval to open foreign currency banking accounts and customs functions on imports and exports relating to GCEC companies.
The first zone was set up in Katunayake and the second in Biyagama initiated by now President Ranil Wickremesinghe. They can be considered to be among two of the successful free trade zones in the world. President Premadasa set up the Koggala Free Trade Zone which was officially inaugurated as soon as I took over as Chairman.
The 200 garment factories programme could be considered one of the main achievements and contributions made by President Premadasa to uplift the rural economy of Sri Lanka and promote exports with the help and support of big companies in the private sector. For the first time we saw factories shifting out of the Katunayake and Biyagama in the Colombo and Gampaha Districts to other provinces.
The criteria was for all garment factories to have a minimum of 500 employees each so that there will be money circulation of rupees two to five million a month in the villages around the factories. All factories also had to give free breakfast to the workers.
The target was to set up 200 factories employing 100,000 youth pumping Rs. 500 million to one billion per month into the national economy. The youth especially the girls in the villages were for the first time producing export quality garments for markets in the USA and UK.
The incentives to those setting up factories included export quotas to the US depending on the area of location of the factory. These ranged from 10,000 dozens for factories located in non-difficult areas, 25,000 dozens for difficult locations and 50,000 for most difficult areas.
The private sector was drawn into the programme with tax incentives, infrastructure such as land, electricity, telephones, water, roadways and other benefits and assured quotas depending on factory location. These enabled expansion into new projects without much hassle and free of bureaucracy. This was the era where the One Stop Shop concept for the approval and implementation of projects carried out by the BOI. All approvals were done under one roof at BOI.
The US garment quotas were utilised by President Premadasa as a strategic tool for developing the rural economy and to help alleviate poverty in Sri Lanka. This enabled Sri Lanka to be one of the top exporters in garments and even after abolition of the quota system to produce quality products at competitive prices.
The garment industry became the largest industrial exporter from Sri Lanka due to the vision of the late president. Workers who had to leave their villages and come to Colombo and Katunayake and live in expensive boarding houses were now able to travel to work from their homes and have a substantial take home pay.
I remember the frequent meetings we had at Sucharitha where President Premadasa invited investors who were due to open factories and solved any problems they brought up. The Chairmen of the CEB, Road Development Authority and the Water Board were alwas present as these meetings as investor complaints were mainly about non availability of electricity, roadways and water.
Increases in garment export quotas were also obtained to sustain the expansion, which took place. Factories were even set up in the north in Vavuniya and in the east in Batticaloa as other areas in the northeast were affected by the war.
We also had investors from UK, Hong Kong, Singapore and Germany investing in factories in rural areas hitherto not even thought of by any industrialist, local or foreign.In the 200 garment factory programme the late president was present for all the official openings of factories and he gave dates to all investors so they had to work round the clock to have their factories ready by the deadline. The opening of each factory was marked by the construction of a clocktower, paid for by the investor, in all the areas they were set up. The clocktowers were opened by the President before he opened the factory.
The novel idea to set up the 200 garment factory programme came from the late Kumar Dewapura who was the Chairman of the Tri Star Group. He was given land in the Kurunegala district by the then Chief Minister Jayawickrema Perera, a former cabinet minister to set up a garment factory and President Premadasa was invited for the opening. It was here that the idea of the 200 factories programme was developed. Dewapura was instrumental in setting up the first few factories and acted as a catalyst to arouse the interests of other investors to join the programme.
The success of the 200 Garment factory Programme from 1991 to 1993 was visible at the time of President Premadasa’s untimely death. At the time 160 locations had been allocated to construct factories and 117 factories, all opened by the late president, were running. Six were ready for opening and 37 under construction.
In 1991 the Apparel and Garment exports were approx. US $ 764 M. With the setting up of the 200 garment factory programme the exports increased tremendously and in 2022 reached US $ 5.4 billion. Many who criticised that the garments industry as a “sunset industry” could now see its sustainability for themselves as well as benefits reaped by the country. These included becoming the highest export earner and biggest employer of females. Tough environmental and working conditions were met to achieve global standards. Today we have many ‘green’ garment factories and investors striking out overseas to set up factories.
The 200 Garment Factory Programme was continued by all successive governments although while in the opposition they criticised it. They started the 50 garment factories programme and supported the garment industry but could not match the implementation capabilities of President Premadasa and the success of the 200 garment factories programme.
Conclusion
President Premadasa made use of the US garment quotas and the GCEC/BOI set up by President Jayawardena for the economic development of the entire country with benefits to rural people and export promotion. Successes achieved during this period should open the eyes of present day rulers to the vision of President Jayewardene and the implementation policies of President Premadasa to take the country forwards.
President Premadasa who never took” no” for an answer expected government servants as well as the private sector to have a “can do” attitude. He was a person who firmly practiced the idiom ‘Walk the Talk’.
He carried out his plans and was involved in all stages of these projects and gave the leadership. He was not comfortable with people who were negative or always came up with excuses.Today’s leaders should follow Premadasa policies to give a jump-start to the economy and make our country a more industrious and prosperous nation and overcome the present crisis.
Former Chairman and Director General Board of Investment of Sri Lanka, Former Chairman Peoples Bank and Peoples Merchant Bank, Former Chairman and Managing Director State Mining and Mineral Development Corporation, Former Chairman and Managing Director Ceylon Leather Product Corporation.
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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